Hong Kong: Tsingtao Brewery's Alliance With Anheuser-Busch Named One of Asia's Top Deals for 2003
Last Updated: 11 February 2004

Johnson Stokes & Master is delighted to announce that Tsingtao Brewery's alliance with Anheuser-Busch has been named one of the "Top CFO Deals of the Year 2003" by the CFO Asia magazine, a publication of the renowned "The Economist" and one of "Top Asian Deals of the Year 2003" by Asian Counsel magazine.

According to CFO Asia, the deal set a precedent for foreigners wanting a strategic stake in China's leading companies. It was also the first of the top three M&A deals of the year and was the only one related to China.

JSM acted as Tsingtao Brewery’s lead counsel in the transaction. Yuan Lu, Company Secretary of Tsingtao Brewery said, "JSM is highly professional and experienced in offering not only legal advice but commercial solutions that meet our objectives. They are impressively efficient and dedicated to their work."

In this transaction, Tsingtao Brewery will, by the end of April 2004, issue to Anheuser-Busch, the world’s largest brewer, in aggregate, three tranches of mandatorily convertible bonds worth US$180M. The bonds are issuable pursuant to a strategic investment agreement entered into between the parties in October last year. This is the first time that a mandatory convertible bond structure has been used in an H share company. As the transaction involved laws and regulations from different areas of Hong Kong, PRC and U.S., JSM has assembled a multi-disciplinary team to work closely to manage the agreement.

One of the key issues of this transaction is control. As part of the deal, special voting arrangements were agreed between Anheuser-Busch and the controlling shareholder of Tsingtao Brewery to ensure that the state will remain as the controlling shareholder of Tsingtao Brewery. Herbert Hui, Co-Head and Director of Corporate Finance Execution of HSBC said, "JSM is instrumental to the design of the voting trust arrangement."

JSM was also involved in other significant M&A deals in China in the past year:

  • JSM acted for China Minmetals HK (Holdings) Ltd to acquire a controlling interest in ONFEM Holdings Ltd and Oriental Metals Holdings CO Ltd. China Minmetals HK (Holdings) Ltd is a wholly-owned subsidiary of China National Metals and Minerals Import and Export Corporation which is one of the major importers and exporters of steels, nonferrous metals and mineral products in the PRC.
  • JSM acted for The Hong Kong and China Gas Company Limited (Towngas) to bid for and purchase a substantial stake in Shenzhen Gas Group Company Limited (SGC), a major state-owned enterprise in Shenzhen. SGC has a net worth of approximately US$150 million and is one of the five state-owned enterprises put forth by the Shenzhen Municipal Government for participation by foreign investors.
  • JSM represented BCA Finance Limited, the wholly owned subsidiary of Indonesia's PT Bank Central Asia Tbk, in its disposal of a 50% equity stake in Fujian Asia Bank Limited. This disposal represents the first time that People's Bank of China and its successor, China Banking Regulatory Commission, have permitted the foreign investor of a Chinese-foreign joint venture bank to sell its entire shareholding to another foreign investor.
  • JSM acted for Hang Seng Bank Limited to acquire 15.98% of the enlarged share capital of Industrial Bank in China for a total consideration of RMB1,725 million (or US$209 million). Subject to obtaining regulatory approval for the share subscription, Hang Seng Bank will become the first foreign financial institution to own more than 15% of the issued shares of a major Chinese commercial bank, and the biggest foreign shareholder of Industrial Bank.

Johnson Stokes & Master is the largest law firm in Hong Kong and one of the leading commercial law practices in Asia. With offices in Hong Kong, Mainland China (Beijing and Shanghai), Thailand (Bangkok) and Vietnam (Hanoi and Ho Chi Minh City), JSM has a multi-national team consisting of over 750 staff of which over 240 are lawyers qualified in local and international jurisdictions.


For further information please contact:

Anne So, Media and Communications Executive, Johnson Stokes & Master

(Tel: +852 2843 4580; E-mail: anne.so@jsm.com)

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